Reserves and Domestic Market Management

 

The Reserves and Domestic Market Management Department is responsible for managing the official foreign exchange reserves in line with the objectives of the Bank. The investment philosophy of the preservation of capital value of the portfolio and the maintenance of adequate liquid foreign assets is to meet obligations and achieving an optimum rate of return within well-defined risk parameters, which is implemented through the Strategic Asset Allocation (SAA) which is approved by the Board of Directors of the Bank. A well-defined corporate governance structure is in place for the investment process to ensure compliance with investment guidelines, monitor performance relative to benchmarks, approve operational policy and endorse any strategic deviations from the approved benchmarks.  Both internal and external managers are used to invest the reserves.

The Department also has responsibility for managing the domestic foreign exchange market. It seeks to maintain orderly conduct through a variety of mechanisms, including adherence to a Code of Conduct. It also carries out the Bank’s intervention policy, buying and selling foreign exchange to authorized dealers to mitigate undue volatility. Additionally, the Department provides information on exchange rates to the public to give an indication of market rates and to facilitate decision-making.

The implementation of monetary policy and other developmental activities by the Bank in money and capital markets, are also facilitated by the Department. It routinely issues Treasury securities on behalf of the Government of Trinidad and Tobago, while performing the registrar function for these securities. The Department promotes the development of the secondary market for Government bonds, and to this end, has facilitated linkages to the Trinidad and Tobago Stock Exchange which facilitates secondary market trading.